Part II of a Five Part Review Essay on

John Tomasi’s Free Market Fairness

The misframing of property theory

In Part I of this series, we saw how Tomasi used the standard consent-versus-coercion misframing of the basic issues in his new book: Free Market Fairness [2012]. In this Part II, we consider the misframing involved in the treatment of property rights. The book has also been the focus of a symposium on the Bleeding Heart Libertarians blog that covers the whole spectrum of liberal thinkers from A to B.

Tomasi echoes Nozick and a number of other libertarian thinkers in focusing on a rather bizarre “self-ownership” treatment of what is broadly known as Lockean or fruits-of-your-labor property theory.

At least since the time humanity moved beyond primitive animism, it has been recognized that only persons can be responsible for anything. Things are not responsible agents; responsibility is always imputed back through an instrument to the human user. A basic function in seemingly any legal system is the determination in trials or other judgments as to who was in fact responsible for some misdeed so that the legal responsibility in terms of liabilities and penalties can be appropriately assigned. Responsibility works both ways; there is also the question of who was responsible for certain beneficial results. People should have the legal responsibility for both the positive and negative results of their deliberate actions, the “fruits of their labor.” The theory of property is concerned with correctly assigning those rights and liabilities whenever new property is produced and old property is consumed, used-up, or otherwise destroyed.

That responsibility principle is essentially primordial; Locke did not invent it. But Locke is usually associated with explicitly applying that principle to the theory of property, particularly the questions of property creation. This is the Lockean principle of “getting the fruits of your labor” which is often called the labor or natural rights theory of property [e.g., Schlatter 1951]. The economic activities of production and consumption differ from exchange in that they inherently involve the initiation and termination of property rights; exchange does not. In production, the services of land, persons, and capital (to use the classical trinity) are the “inputs” that are used-up in the process of producing the products or “outputs” to be sold to the customers. Any private property system needs some mechanism to determine who holds the liabilities for the used-up inputs and who has the initial property rights to the outputs.

But here again there is a problem when production is organized under the employer-employee relationship as opposed to say a family farm or small artisan-operated workshop where people are working for themselves. All the human beings who work in a productive enterprise, working employers or employees, are jointly de facto responsible for using up all the inputs to the process, but none of those liabilities are legally assigned to the employees. Similarly that jointly responsible human activity produced the products or outputs, but none of the initial property rights to the produced outputs are assigned to the employees. Instead, the employees are legally treated as only the suppliers of one of the “inputs,” labor services, and thus they are only one of the outside parties to whom the liability for that used-up input is owned, a liability usually paid off as wages and salaries.

When all or the overwhelming number of the responsible human beings involved in a joint productive activity have zero legal liability for the used-up inputs and zero legal ownership of the produced outputs, then it is somewhat problematic to give an “account” for the activity in terms of the responsibility principle. Hence our liberal scholars and social scientists need some other way to completely reframe the question preferably without even mentioning the r-word “responsibility” or expressions like “fruits of one’s labor” (unless reinterpreted in some Pickwickian sense). Here again, it should be noted that most leftists are more than willing to join with liberals in not talking about the structure of property rights in production and in avoiding the responsibility or fruits-of-your-labor principle, all in favor of endlessly contesting what is “really” voluntary or coercive in the employment relation (see Part I for that misframed “debate”).

Here is where Locke’s genius comes to the foreground and the libertarians’ “self-ownership” theory comes into play. Instead of thinking of persons taking deliberate actions, think of each person as getting an initial amount of a commodity “labor” like an initial allotment of money or chips in a board game. Then persons can make exchanges with Nature by mixing their own labor with unowned natural resources and getting in exchange certain products. By ignoring all the creation and termination of property rights in ordinary production and consumption, and by sticking to a mythical Lockean initial state for the explanation of property rights, one can tell an appropriate story without even mentioning the responsibility principle. Phrases like “fruits of one’s labor” might be too suggestive, and, as far as this reader can tell, Tomasi manages to avoid that standard phrase in the entire book so the “self-ownership” interpretation of Lockean property theory has served that reframing purpose well.

But even if the phrase “fruits of one’s labor” might be accidently mentioned, then part of Locke’s genius was showing that it could be given a Pickwickian interpretation compatible with the employment relation. Instead of taking “one’s labor” to mean the labor one performs, reinterpret it to mean the labor one “owns.” Then the employer of employees, like the master of slaves, is always getting the “fruits of his labor.” As Locke put it:

Thus the Grass my Horse has bit; the Turfs my Servant has cut; and the Ore I have digg’d in any place where I have a right to them in common with others, become my Property, without the assignation or consent of any body. The labour that was mine [sic], removing them out of that common state they were in, hath fixed my Property in them. [Locke, Second Treatise, section 28]

As C. B. Macpherson put it:

To Locke a man’s labour is so unquestionably his own property that he may freely sell it for wages. …The labour thus sold becomes the property of the buyer, who is then entitled to appropriate the produce of that labour. [Macpherson 1962, 215] …

When Locke’s assumptions are understood as presented here, his doctrine of property appears in a new light, or, rather, is restored to the meaning it must have had for Locke and his contemporaries. For on this view his insistence that a man’s labour was his own … has almost the opposite significance from that more generally attributed to it in recent years; it provides a moral foundation for bourgeois appropriation. [Macpherson 1962, 221]

Now everyone knows that the responsibility for human actions cannot be transferred like a commodity. The simple example of a hired criminal emphasizes the de facto inalienability of responsibility. A hired killer might tell the judge that he “sold” his actions to his employer. He voluntarily agreed to “perform certain actions in return for agreed upon compensation” (the standard description of the labor contract), and that is the extent of his legal involvement. But the judge would no doubt be unmoved by this argument that the employer should have the legal responsibility for the fruits of “his labor.” Of course, any contract to commit a crime is illegal but the hired killer is charged, along with his employer, with murder, not making an illegal contract.

When Ronald Coase described the hiring or renting[1] of human beings as the “legal relationship normally called that of ‘master and servant’ or ‘employer and employee’,” he used a modern British law book on the employment relation. That law book explains the case of the hired criminal as follows:

All who participate in a crime with a guilty intent are liable to punishment. A master and servant who so participate in a crime are liable criminally, not because they are master and servant, but because they jointly carried out a criminal venture and are both criminous. [Batt 1967, 612]

When the venture “they jointly carried out” was not a criminous venture but an ordinary productive enterprise, then it is hard for our liberal scholars and social scientists to argue that employees suddenly become non-responsible instruments “employed” by their “employer.” Hence some alternative framing is required that simply will not raise these troublesome questions. Tomasi takes up the libertarian “self-ownership” theory with gusto and perhaps without any inkling that this framing hides the institutionalized violation of basic responsibility principle that should be the foundation of the private property system and other legal imputations.[2]

References

Batt, Francis 1967. The Law of Master and Servant. London: Pitman.

Coase, R. H. 1937. The Nature of the Firm. Economica. IV (Nov. 1937): 386-405.

Ellerman, David 1992. Property & Contract in Economics: The Case for Economic Democracy. Cambridge MA: Blackwell. All my references downloadable at: www.ellerman.org .

Fischer, Stanley, Rudiger Dornbusch and Richard Schmalensee 1988. Economics. New York: McGraw-Hill Co.

Locke, John 1960 (1690). Two Treatises of Government. New York: New American Library.

Macpherson, C.B. 1962. The Political Theory of Possessive Individualism: Hobbes to Locke. Oxford: Oxford University Press.

Pateman, Carole 2002. Self-Ownership and Property in the Person: Democratization and a Tale of Two Concepts. Journal of Political Philosophy. 10 (1): 20-53.

Samuelson, Paul 1976. Economics. New York: McGraw-Hill.

Schlatter, Richard 1951. Private Property: The History of an Idea. New Brunswick: Rutgers University Press.

Tomasi, John 2012. Free Market Fairness. Princeton: Princeton University Press.